United States to Pursue Action Against Monopolistic Canadian Wheat Board

Contact:
Richard Mills (202) 395-3230

02/15/2002

WASHINGTON – Responding to a complaint filed by the North Dakota Wheat Commission (NDWC), U.S. Trade Representative Robert B. Zoellick announced today that the United States will pursue multiple avenues to seek relief for U.S. wheat farmers from the trading practices of the Canadian Wheat Board (CWB), a government monopoly trading enterprise.

USTR also today released an "affirmative finding" that reviews the results of its investigation, details the CWB's monopolistic characteristics, and describes the steps USTR intends to take to address this issue.

"The Government of Canada grants the Canadian Wheat Board special monopoly rights and privileges which give it competitive advantages that hurt U.S. wheat farmers," said Zoellick. "We agree with North Dakota wheat farmers that Canada's monopolistic system disadvantages American wheat farmers and undermines the integrity of our trading system. We are committed to using all effective tools at our disposal to stop the Canadian monopoly wheat board from hurting our farmers. We will undertake several strong initiatives, working with producers in North Dakota and others in the wheat industry, to address our problems with the Canadian Wheat Board."

USTR will aggressively pursue a four prong approach to fight for a level playing field for American farmers:

• First, USTR will examine taking a possible dispute settlement case against the Canadian Wheat Board in the World Trade Organization (WTO);

• Second, the Administration will work with the North Dakota Wheat Commission and the U.S. wheat industry to examine the possibilities of filing U.S. countervailing duty and antidumping petitions with the U.S. Department of Commerce and U.S. International Trade Commission.

• Third, working with industry, USTR will also identify specific impediments to U.S. wheat entering Canada and present these to the Canadians so as to ensure the possibility of fair, two-way trade.

• Fourth, these short-term actions are complemented with the Administration's ongoing commitment to vigorously pursue comprehensive and meaningful reform of monopoly state trading enterprises in the WTO agriculture negotiations. Those negotiations gained new momentum with the launch in November of the Doha Development Agenda, set to conclude by 2005.

This decision is in response to a petition filed by the North Dakota Wheat Commission in September 2000 under section 301 of the Trade Act of 1974. USTR undertook an unprecedented 16-month investigation examining the practices of the monopoly Canadian Wheat Board. In addition to inviting public comment twice on the investigation, USTR requested that the U.S. International Trade Commission (ITC) examine the competitive practices of the Canadian Wheat Board in the U.S. market and overseas. As part of its investigation, the ITC held a public hearing, requested public comments and pursued multiple avenues to obtain information on the Canadian Wheat Board.

USTR has decided not to impose a tariff rate quota (TRQ) at this time since such an action would violate our NAFTA and WTO commitments, could result in Canadian retaliation against U.S. agriculture, and would not achieve a durable solution or a permanent change to the market distortions caused by the monopoly of the Canadian Wheat Board.